Labor Relations Update

It's been a quiet few weeks for the NLRB.  Since January 1, the NLRB has issued only a small number of decisions, none of which appear to be noteworthy.  There are, of course, many developments that are in process.  For example, we still do not know the full effect of the NLRB's decision in Specialty Healthcare, where the NLRB adopted the micro union standard, and which has since been applied in an alarming way.   The NLRB also has pending its new election regulations, which although under challenge, could bring major changes to the way bargaining units are established.

The fact is the NLRB's micro union standard and election procedure regulations are probably only the tip of the proverbial iceberg.  These are the changes the NLRB could accomplish; remember, the NLRB's original proposed election regulations were much broader in scope, and were only scaled back after a wave of intense opposition.  So, the NLRB clearly is receptive to more sweeping change. 

A recent decision demonstrates just how receptive the agency could be in the coming months.  In the final hours of 2011, the NLRB issued 2 Sisters Food Group, Inc., 357 NLRB No. 168 (December 29, 2011).pdf, which to date has gone unnoticed.  This decision, however, provides us with substantial evidence of NLRB mission creep.

The facts in 2 Sisters are fairly basic.  The union lost a representation election by a vote of 66 to 87, with more than enough challenged ballots to alter the outcome.  The union then filed numerous objections, some of which were sustained, some of which are rejected.  The employer was found, for example, to have unlawfully terminated a union adherent during the election campaign.  Standing alone, an unlawful termination would be enough to warrant a rerun election (indeed, Chairman Pearce and Members Becker and Hayes all agreed to sustain the finding that the termination was unlawful, which means the election would be thrown out in any event). 

The truly remarkable aspect of the 2 Sisters decision is that the vast majority of it deals with issues that had no effect whatsoever on the election.  These issues show how unions will attempt to cash in on the NLRB's receptivity to change by bringing challenges asking the agency to overturn or alter existing law.  Here are a few examples-

Handbook violations.  As we have previously detailed, the NLRB has been finding that the mere existence of "overbroad" handbook violations may be enough to overturn an election even when there is no evidence the policy was enforced, let alone that employees were even aware of it.  In 2 Sisters, Chairman Pearce and Member Becker found that the employer's rule subjecting employees to discipline for "inability or unwillingness to work harmoniously with other employees," was an unfair labor practice (and, therefore, also grounds for an objection) because "it was sufficiently imprecise that it could encompass any disagreement or conflict among employees, including those related to discussions and interactions protected by Section 7, and that employees could reasonably construe the rule to prohibit such activity."  The NLRB also ruled the requirement that employees arbitrate all disputes violated the Act.

The problem with these kinds of violations is twofold.  First, there is no evidence that the rules were actually construed to prohibit protected union activity (or any other activity for that matter).  Indeed, the election seems to have been hotly contested, which is actually proof the "harmonious" and "arbitration" handbook policies had no effect on the election.  One can see how important the handbook rule might be if that was the only objection to an election:  the NLRB would be nullifying free choice based on a purely theoretical impact of a policy found in a multi-page handbook odds are the employees received, yet never actually read.  Second, and more important, this finding shows that since the NLRB is more receptive to such charges, employers can and should expect unions to raise more of these challenges.  The ruling creates an incentive for the union to scour the employer's handbook in search of some innocuous phrase, such as a requirement that employees work "harmoniously."   No proof other than the policy is required because the NLRB decides what the employee would "reasonably construe" a rule to mean.  So, the union will hold onto the issue until after the results of the election are known.  If the union loses, then it will simply file objections asking the results be overturned based on some obscure policy buried in the handbook.  While this is an area of law that changes, and will continue to change, each employer should review its handbook in an attempt to remove such hidden land mines.

Employer Meetings.  The union in 2 Sisters objected to the employer's holding of mandatory meetings during the campaign to discuss its views on the union.  Even though the union acknowledged that the employer's meetings were not objectionable under the law, it still asked for the rule to be changed.  Although the NLRB did not reach this issue, Member Becker, in a three page dissent, left a parting shot, which is sure to set the stage for the next few months.  

Since 1953, it has been the law that the employer may hold mandatory meetings in which it expresses its view on the union.  The employer is prohibited from holding such meetings during the twenty-four hour period prior to the election.  Member Becker made clear his view that such rule should be discarded. and employers should be prohibited from holding any mandatory meetings to discuss the union:

Board-supervised elections have been called the 'crown jewel of the Board's accomplishments' under the Act. . .By continuing to permit employers to require that employees attend campaign meetings as a condition of continued employment, the Board does not simply tarnish that jewel, it fractures it.  I would not continue down this long but fundamentally misguided path.

So, the rule of the last 59 years has been wrong, despite the make-up of the NLRB changing from pro-labor to pro-management numerous times.  Member Becker would have it that an employer may not call a meeting to discuss with its own employees a matter that concerns everyone at the workplace just because the topic is the union.  As extreme as the view may sound, we can expect the issue will be raised again in the coming months, and the NLRB likely will have some receptivity to it.

Site of the election.  Having secured a rerun election, the union in 2 Sisters requested that the second election be held off-site away from the employer's premises.  The NLRB did not grant the request yet expended five pages of the decision noting that the Regional Director has the ultimate authority to direct an election to be held at a place other than an employer's premises.  The opinion sets out guidelines the Regional Director should consider in making his or her decision on the site of an election.  Why spend so much time talking about this issue?  Clearly, the NLRB is sending a signal.  There is enough language in these pages that indicates a new tactic may be for the union to request a location for an election other than an employer's workplace, and if its request is denied, create yet another issue to attack the results.  Thus, the NLRB seemed to be setting this issue up for the future:

While the existing empirical work on this subject is not definitive, it is persuasive and creates concern that holding representation elections on premises controlled by one party without the consent of all other parties is inconsistent with the Board's obligation to insure[] that no party gains last minute advantage over the other.

With the exception of mail ballot elections, the representation election is almost always held at the employer's premises.  This is not for any nefarious reason, but a more fundamental, logical one inherently tied to the NLRB's mission:  the employer's premises is where the employees are most likely to be located and where the NLRB can ensure the greatest turnout. 

Calling the majority's discussion of the election site "unwarranted" and "unprecedented," Member Hayes, summarized the issue succinctly in his dissent:

To some, myself included, it may seem surpassingly strange to premise a change in the requirements for resolving disputes about where to hold a Board election on the prospect that an employer might exercise its right to communicate with employees on a question concerning representation.  By now, however, we should be accustomed to my colleagues' concern that this should happen.  Time and time again, they have demonstrated a willingness, if not open zeal, for limiting employer communications. . .

Again, 2 Sisters issued in the final days of 2011 and has received no attention. The arguments made by the union in the case are telling, however, about some of the strategies employers are likely to see in the very near future as unions continue efforts to curtail employer communication.  Of course, the make-up of the NLRB has changed recently, so no one knows what will happen, but it is a safe guess the agency will at least be receptive to the change. 

The NLRB continues its march to expand the influence of unions in the workplace, this time revisiting an issue that has been the subject of much litigation over the years.  In a recent decision in Jurys Boston Hotel, 356 NLRB No. 114 (March 28, 2011).pdf the NLRB ruled (2-1, no surprise Member Hayes dissented) that the employer's handbook rules were sufficient, standing alone, to overturn a decertification election in favor of ending union representation.

The facts of the case underscore the breadth of the ruling:  The employer operates a hotel which opened in July 2004.  Before the hotel even opened, the employer entered into a neutrality and card-check arrangement with the union where it ultimately agreed to accept the union on the basis of authorization cards without an election. The parties then entered into a collective bargaining agreement.  When the agreement expired, an employee filed a petition to decertify the union.  The employer had in place since opening a 63 page handbook. Employees were asked, "though not required, to sign a receipt for the handbook at the time they received it, stating they 'will' read it."

The employer, bound by the neutrality agreement, directed supervision to act in a "neutral if not positive" fashion regarding union representation during the decertification campaign.  So, this could not have been a hotly contested campaign. 

The union never said a word about the handbook, that is, until the employees decided they wanted the opportunity to actually vote in a secret ballot elecion on whether to continue representation.  Specifically, after the petition was filed the union filed an unfair labor practice charge alleging, among other things,  the handbook's rules regarding solicitation, loitering on premises, and the wearing of buttons were unlawfully overbroad. There is no evidence the employer ever enforced any of the rules in question, either before or after the filing of the petition. 

The employees elected by a vote of 47 to 46 to end union representation.  The union challenged the result, filing objections asserting, among other things, that the same handbook rules interfered with employee free choice.  The hearing officer overruled all of the objections, citing Safeway, Inc., 338 NLRB 535 (2002).pdf, a case where the NLRB refused to overrule a decertification election based on a confidentiality policy that arguably was overbroad, noting

There is no indication that the confidentiality rule has ever been enforced, or that it has ever placed any impediment on the ability of employees to discuss terms and conditions of employment with the Union, or with other employees.  To the extent that any employee was confused about their statutory right to do so, the Union was ideally placed to advise the employees of their rights to do so.  There is no evidence that the Union was ever called on to do so, or that, prior to decertification, the Union viewed this rule as in any way infringing on employees' Section 7 rights.

Despite this precedent, the NLRB in Jurys Boston found Safeway, Inc. distinguishable because, incredibly,

First, unlike the incumbent union in Safeway, the Union here did not fail to challenge the unlawful rules 'prior to its decertification.'  Rather, it filed an unfair labor practice charge based on the rules 9 weeks before the election.  After a challenge to the Union's bargaining status was raised for the first time, the impact of the employee's rules on employees' right to campagin acquired new significance.

This reasoning is remarkable.  The employees in the case were never required to even acknowledge receipt of the rules.  Although it is not stated in the decision, that result is likely because the union insisted during bargaining, as often is the case, that employees cannot be required to sign handbook acknowledgements.  In other words, the union likely took the position that the handbook was something subordinate to the collective bargaining agreement, which probably contained its own work rules.  Unlike most places of employment, there is not even an acknowledgement that says the employees received or were otherwise aware of these rules.

The fact the union challenged the handbook rules in this case as a distinguishing factor also rings somewhat hollow.  Absent any evidence the rules were ever important to employees who were not required to read them likely means the rules gained "new signifiicance" because the union challenged them, not because employees were thinking about them.  The union, the representative of the employees could have taken a public position that the rules in question were not enforceable; it did not.  The union hedged its bets by lodging an unfair labor practice.  Had the union actually believed the rules were playing a part in the decertification campaign, it was within its control to block the election until the legal issues were sorted out; it did not exercise this option.  Instead, the union waited to learn the outcome of the election, and then complained that the rules somehow played a part in the result. The decision makes it more likely an incumbent union will scour an existing handbook for potentially overbroad policies and then file a charge.

It still is good policy for employers to maintain handbooks.  Written policies are needed to make sure the entire workforce, management and supervision, understand the rules of the workplace.  This decision underscores the need, however, to routinely review such handbooks to make sure there are no legal landmines that could be tripped later on when it is convenient. Such a review and re-issuance, if necessary, can save a lot of time and resources.  Jurys Boston is especially noteworthy because it took place in a decertification setting.  The NLRB has held that overbroad handbook rules can serve as the basis to overturn a representation (as opposed to decertification) election.  See  Freund Baking Co., 336 NLRB 847 (2001).pdf